HomeMy WebLinkAbout1995 05 15 - Transfer of City Utility SystemSARAH M. BLEAKLEY
WARREN S. BLOOM
HARRY F. CHILES
MAUREEN MCCARTHY OAUGHTON
VIRGINIA SAUNOERS OE'LEGAL
L. THOMAS GISLIN
MARK O. LAWSON
STEVEN E MILLER
MARK T. MUSTIAN
ROBERT L NABORS
GEORGE M. NICKERSON. JR.
STEN T. SLIGER
GREGORY T. STEWART
JOHN R. STOKES
WILLIAM O. TYLER
MICHAEL L WATKINS
JEAN E. WILSON
ABORS, G113LIN & NICKERSON, P
ATTORNEYS AT LAW
BARNETT BANK BUILDING, SUITE 400
315 SOUTH CALHOUN STREET
TALLAHASSEE. FLORIDA 32301
TELEPHONE (904) 224.4070
TELECOPY (9041 224.4073
May 15, 1995
Mayor and City Commissioners
City of Sebastian, Florida
ATTENTION: City Manager
Re: Transfer of City Utility System
Dear Sir or Madam:
THE POINTE. SUITE 1060
2302 ROCKY POINT DRIVE
TAMPA. FLORIOA 33607
(61 JI 261.2222
TELECOPY (61]1 261-0129
SIGNATURE PLAZA, SUITE 1060
201 SOUTH ORANGE AVENUE
ORLANDO. FLORIOA 32501
14071 426-7595
TELECOPY(40T)426.4022
I am providing this letter with respect to the proposed sale
by the City of Sebastian of its water and wastewater utility system
to Indian River County in return for the assumption by the County
of the City's indebtedness with respect to the -system (the "City
Bonds"). My understanding is that the proposed structure will
result in the City Bonds remaining outstanding after the transfer
of the utility system.
Section 8.03 of the City's Resolution authorizing the City
Bonds (the "Bond Resolution") permits the amendment of 'certain
sections of the Bond Resolution without the consent of the holders
of the City Bonds where the Insurer has consented to such amendment
and the amendment does not adversely affect holders of the City
Bonds. In conversations with Bob Reid'of Bryant, Miller and Olive,
p,'A the County's bond counsel, he indicated that MBIA, the
insurer of the City Bonds (the "Insurer"), is prepared to consent
to an amendment to the Bond Resolution pursuant to said Section
8.03, whereby the lien on the City's half=eent sales tax revenues
would be released and the City.Bonds would thereupon be secured by
a pledge of the County's combined water,and sewer utility system,
on a parity with other County water and sewer debt.
Mr. Reid has indicated that it is his firm's position that the
Countv should file a validation suit in Circuit Court in Indian
River County to affirm the County's ability to assume the
obligation to pay the City Bonds in the fashion contemplated above.
We concur with this position. We suggest to the City that, as part
of the cc^rleted transaction, the City receive legal opinions from
Bryant, Miller and Olive, P.A. to the effect that (1) the amendment
Mayor and City Commissioners
City of Sebastian, Florida
Page 2
May 15, 1995
of the Bond Resolution complies with the provisions of Article VIII
of the Bond Resolution and (2) that, based on such amendment to the
Bond Resolution and the validation judgment, the lien of the Bond
Resolution on the City's half -cent sales tax revenues has been
extinguished. If in the future the City desires to pledge the
half -cent sales tax revenues to secure other City indebtedness, it
will be necessary for us to rely on these opinions.
We caution the City that said Section_ 8.03 is a rarely -used
provision of similar bond resolutions and that any determination
that an amendment is not adverse to bondholders is necessarily
subjective and subject to different interpretations; however, we
believe that the approach suggested by Bryant, Miller and Olive
minimizes the risks to the City in connection with the transfer.
Please feel free to call
assistance.
if I may be of any further
Vez
Max